China sets new path, how should India respond?

Last updated on: November 19, 2013 13:49 IST

'India and China are at new inflection points, domestically and internationally. India needs to throw up a new leader whose vision is clear, experience laden with wisdom and articulation brimming with restraint and tolerance,' says Ambassador K C Singh.

The much anticipated meeting of the 3rd Plenum of the 18th Party Congress of the Communist Party of China was held on November 9-12. The communique at its end generally left observers underwhelmed. The stock indices in Shanghai and Hong Kong fell by 1.8 and 1.9 percent respectively.

Before it began, it was being likened to the 3rd Plenum of the 11th Party Congress of 1978, which ushered the economic opening of China. Although some observers noted that even that communique had more alluded to the future path than spelt it out in detail.

Both these landmarks are significant for China and the world. Even more so they are significant for India as in the Asia of the 21st century the two neighbours can either be pillars of stability or competing, quarrelling rivals. Both will be driven by their domestic politics and the need to keep their large populations harnessed to economic growth.

In a competitive world, this would depend on how they manage globalised production chains and inter-dependence between commodity exporters and producers, between manufacturers and their markets etc.

Although Jawaharlal Nehru died in 1964, 12 years before Mao Zedong, Indian economic and foreign policies continued in his prescribed mould -- a socialistic command economy and non-alignment. If Mao dealt his nation a lethal blow with the Cultural Revolution in 1966, Nehru's daughter upended Indian democracy in 1975.

China was unshackled by Mao's worthy successor Deng Xiaoping from about 1978, while India ambled along till 1984, when from the tragedy of Indira Gandhi's assassination emerged her son Rajiv Gandhi, with a mandate rivalling that of his grandfather, and a nation awaited, yearning for leadership and change.

It is instructive to compare the Gross Domestic Product figures of the two nations, in billions of US dollars, starting from 1978, when it was for India 139 and China 216 and in 1979: 155 & 261. Roughly the Chinese economy was about one-and-a-half times that of India, but the population being larger the Indian per capita was almost even or better.

The story in fact worsens for India in 1984, mired in Punjab militancy and the Indira Gandhi assassination with figures for India and China being 222 & 301 in 1983, followed by the Indian economy contracting to 215, while China grew to 309.

Contrariwise China stumbled in 1986, while Rajiv Gandhi's promise was firing the Indian economy, the figures were 253 for India and 297 for China.

That is where parity or even competition ends. By 1988 and 1989, when the Indian economy was stagnant at $301 billion, China had jumped to $404 & 451 billion. In 1993, while India contracted to $284 billion, China was surging to $613 billion, having grown in one year by around 25 percent.

While Rajiv Gandhi had both the mandate and the opportunity to be India' Deng, that role fell upon P V Narasimha Rao in 1991, when India had already lagged behind China. The little stumble that China had in 1989, following the Tiananmen Square crackdown was soon turned into an opportunity with Deng's southern tour of 1992, which set the ground for developing the economic zones in coastal areas, that have today becoming economic powerhouses.

Why is then the current 3rd plenum important for India?

The communique repeatedly uses the phrase employed at its beginning: 'Some major issues in comprehensively deepening reform.' It pronounces the desire to make China a 'moderately prosperous society' by 2020.

It seeks to do so from a new historic starting point. It cleverly blends the name of Mao and Deng's theory into the new paradigm. Finally, it commits to make China a 'modern, powerful country before the end of the century.' President Xi Jinping emerges with consolidated power with the setting up of two administrative bodies, one to deal with the economy and the other national security.

This is obviously a defining moment for China. They do not want a repeat of the Tiananmen Square uprising, when expectations outran reform. Clearly the national security committee is to ensure that economic tweaking to transmute Chinese economy from an export led and manufacturing dependent one to that which generates domestic consumption and increases the role of services.

This needs new policies on land acquisition, urbanisation, ecology etc. But the signal being sent is that this will be done top-down and without concomitant political liberalisation.

Unnoticed by India, a second time in four decades, a crucial neighbour is consolidating to leap. India is stuck in an increasingly polarised electoral battle, where issues are less important than personalities and hence the recourse to personalised attacks.

India once again yearns for leadership that can combine efficiency and governance with transparency and accountability.

But even more so it seeks a leader who brings a concrete vision of where India would be in ten years, 20 years and so on. The ruling alliance led by Congress can only hope that sheer contradictions would leave the challengers short of their target, or even worse beget a coalition consisting of fractious and parochial interests.

It is sometimes erroneously simplified that it is easier for China to implement policies as it is run by an authoritarian, centralised ruling elite.

In many ways India and China may be alike. China too has crony capitalism, waste, looting of public resources, inefficient State enterprises, out of control cities/regions spending on infrastructure etc.

An example is that while construction of golf courses was banned in 2004 and reiterated in 2011, their number, which was 170 in 2004 is today estimated to be 650. The moral is China can tolerate waste because of sheer productive strength.

Thus at the beginning of the 21st century India and China are at new inflection points, domestically and internationally. India needs to throw up a new leader whose vision is clear, experience laden with wisdom and articulation brimming with restraint and tolerance.

President Xi appears equipped to inherit the mantle of Deng Xiaoping. Where is the true successor to Narasimha Rao?

Ambassador K C Singh, a distinguished diplomat, is now a commentator on diplomatic and security issues.